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Gertrude took out a 30-year loan for $95,000 at 8.4% interest, compounded monthly. If her monthly payment on the loan is $723.75, how much of her first payment went toward note reduction?

User Yara
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2 Answers

1 vote

Answer:$58.75

Explanation:

User YemSalat
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5 votes

Answer:

$58.75

Explanation:

The monthly interest rate is 8.4%/12 = 0.7%, so the first month's interest is ...

$95,000×0.007 = $665

The amount of the first payment that goes to note reduction is the part that does not go for paying interest. That difference is ...

$723.75 - 665.00 = $58.75

User Skoeb
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